Hutcherson v. Ward

• Decision Date: 27 December 2013
• Docket Number: No. 49T10–1302–TA–10.,49T10–1302–TA–10.
• Citation: 2 N.E.3d 138
• Court: Indiana Tax Court
• Parties: Joseph & Jeanne HUTCHERSON, Petitioners, v. Robin L. WARD, Hamilton County Assessor, Respondent.

2 N.E.3d 138

Joseph & Jeanne HUTCHERSON, Petitioners,

v.Robin L. WARD, Hamilton County Assessor, Respondent.

No. 49T10–1302–TA–10.

Tax Court of Indiana.

Dec. 27, 2013.

Thomas A. Aycock, Aycock Law Office, P.C., Fishers, IN, Attorney for Petitioners.

Gregory F. Zoeller, Attorney General of Indiana, Jessica E. Reagan, Deputy Attorney General, Indianapolis, IN, Attorneys for Respondent.

ORDER ON RESPONDENT'S MOTION TO DISMISS

WENTWORTH, J.

The Hutchersons appeal the Indiana Board of Tax Review's final determination denying them the homestead standard deduction on their Hamilton County property for the tax years 2004 through 2007. The Assessor has filed a Motion to Dismiss for lack of subject matter jurisdiction or alternatively, for failure to state a claim upon which relief can be granted. The Court denies the Assessor's Motion.

FACTS AND PROCEDURAL HISTORY

On May 12, 2003, the Hutchersons filed for the homestead standard deduction with the Hamilton County Auditor. When the Hutchersons paid their property taxes on November 9, 2012, they were told by an employee at the Auditor's office that their homestead deduction was not “active.” On further investigation, the Hutchersons discoveredthat they had not received the homestead deduction for the years since they filed their application. ¹ The error was corrected for the immediately preceding three tax years (2008, 2009, 2010). To correct the error for the 2004 through 2007 tax years, the Hutchersons filed four petitions to correct error (Forms 133) with the County Auditor on November 13, 2012. In the petitions, the Hutchersons claim that through an error of omission by a county official, they were not given credit for the homestead deduction as permitted by law. They did not file any claims for refund with the petitions. On November 15, 2012, the Hamilton County Property Tax Assessment Board of Appeals denied all four petitions.

The Hutchersons appealed to the Indiana Board on November 30, 2012. On December 21, 2012, the Indiana Board denied the Hutchersons' appeal without holding a hearing, stating that the Hutchersons' petitions were not timely because they were not filed within three years after the taxes were first due as required by Indiana Code § 6–1.1–26–1 to obtain a refund.

On February 4, 2013, the Hutchersons filed this original tax appeal. The Assessor filed a motion to dismiss pursuant to Indiana Trial Rules 12(B)(1) and 12(B)(6) on March 7, 2013, alleging the same untimeliness that the Indiana Board found in its final determination. The Court heard the parties' arguments on June 14, 2013. Additional facts will be supplied as necessary.

STANDARD OF REVIEW

In initial appeals from final determinations of the Indiana Board, the Tax Court's review of disputed issues of fact generally is confined to the record from the administrative proceeding. Ind.Code § 33–26–6–3(b)(1) (2013). Moreover, the Tax Court's review is generally limited to the issues raised before the Indiana Board or otherwise described in its final determination. Ind.Code § 33–26–6–3(b) (2013). In certain instances, however, issues or evidence addressed by the Indiana Board in its final determination that were not addressed at the administrative hearing may be argued for the first time on appeal to this Court. See Indiana C.A.P. Dirs. Ass'n v. Dep't of Local Gov't Fin., 797 N.E.2d 878, 881 (Ind. Tax Ct.2003) (stating that when it is impractical to conduct another administrative hearing, the Tax Court must afford the taxpayer an opportunity to respond to new issues in this Court); Wirth v. State Bd. of Tax Comm'rs, 613 N.E.2d 874, 879 (Ind. Tax Ct.1993) (explaining that a taxpayer is constitutionally empowered to respond for the first time on appeal to new issues raised in the final determination). As a result of its review, the Tax Court may reverse an action of the Indiana Board that is

(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;

(2) contrary to constitutional right, power, privilege, or immunity;

(3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory jurisdiction, authority, or limitations;

(4) without observance of procedure required by law; or

(5) unsupported by substantial or reliable evidence.

Ind.Code § 33–26–6–6(e)(1)–(5) (2013).

ANALYSIS

The Assessor makes two alternative arguments in support of its motion to dismiss the Hutchersons' appeal. First, the Assessor argues that the Tax Court lacks subject matter jurisdiction because the Hutchersons failed to comply with the statutory requirements to obtain a refund under Indiana Code § 6–1.1–26–1. (Resp't Mot. Dismiss at 2–3.) In the alternative, the Assessor argues that the Tax Court must dismiss the appeal because the Hutchersons failed to state a claim upon which the court can grant relief, having failed to timely file their petitions to correct error under Indiana Code § 6–1.1–15–12 (Petition to Correct Error Statute) and Indiana Code § 6–1.1–26–1 (the Refund Statute). (Resp't Mot. Dismiss at 2–4.)

I. Subject Matter Jurisdiction

Subject matter jurisdiction is the power conferred on a court by the Indiana Constitution or statute to hear and determine a particular class of cases. State v. Sproles, 672 N.E.2d 1353, 1356 (Ind.1996); Fresenius USA Mktg., Inc. v. Indiana Dep't of State Revenue, 970 N.E.2d 801, 803 (Ind. Tax Ct.2012). Thus, when deciding a claim for lack of subject matter jurisdiction under Trial Rule 12(B)(1), this Court must determine whether the claim falls within the general scope of its authority. Carroll Cnty. Rural Elec. Membership Corp. v. Indiana Dep't of State Revenue, 733 N.E.2d 44, 47 (Ind. Tax Ct.2000). The Tax Court's enabling legislation confers exclusive jurisdiction over cases that 1) arise under Indiana's tax laws, and 2) are initial appeals of a final determination of the Indiana Board. Ind.Code § 33–26–3–1 (2013).

This case arises under the tax laws of Indiana because the application of two Indiana property tax statutes (Indiana Code § 6–1.1–15–12 and Indiana Code § 6–1.1–26–1) is necessary to resolve the action. See Sproles, 672 N.E.2d at 1357 (explaining that a case arises under Indiana's tax laws if its resolution involves the collection of a tax or defenses to that collection or if an Indiana tax statute creates the right of action). Also, this case is the initial appeal of a final determination of the Indiana Board. Accordingly, because the Hutchersons' appeal falls within the Tax Court's general scope of statutory authority, the Tax Court has subject matter jurisdiction.

Nonetheless, the Assessor claims that the Tax Court lacks subject matter jurisdiction because the Hutchersons did not file their petitions to correct error within a three year statutorily required period. ( See Resp't Mot. Dismiss at 2–3.) Indeed, Indiana Code § 33–26–6–2(a) states that “[i]f a taxpayer fails to comply with any statutory requirement for the initiation of an original tax appeal, the tax court does not have jurisdiction to hear the appeal.” Ind.Code § 33–26–6–2(a) (2012). Failure to comply with a statutory requirement, such as a statute of limitations, however, would not rob the Court of subject matter jurisdiction, but would merely prevent the Court from exercising its subject matter jurisdiction to resolve the matter. See Packard v. Shoopman, 852 N.E.2d 927, 929–30 (Ind.2006) (“procedural requirements [do] not constitute a limitation on subject matter jurisdiction in the sense that the court cannot hear cases of the same general class”). See also Gupta v. Jay Cnty. Auditor, 910 N.E.2d 796, 798 n. 1 (Ind.Ct.App.2009) (explaining that an untimely filing of a motion to set aside a tax sale in the trial court did not implicate subject matter jurisdiction). Thus, the Assessor's claim under Trial Rule 12(B)(1) is improper.

II. Failure to State a Claim Upon Which Relief Can be Granted

A. Indiana Code § 6–1.1–15–12—Petition to Correct Error Statute

The Assessor first contends that the Hutchersons failed to state a claim upon which the court can grant relief because the Petition to Correct Error Statute requires a taxpayer to file a petition to correct error within three years after the taxes were first due. ( See Resp't Mot. Dismiss at 2–4.) Conspicuously absent from the Petition to Correct Error Statute, however, is an express time limitation within which a taxpayer must file the petition. See generallyInd.Code § 6–1.1–15–12 (2013). Moreover, no statutory language limiting the time in which to file a petition to correct error exists anywhere in Chapter 15. See Ind.Code 6–1.1–15 (2013).

In 1989, the State Board of Tax Commissioners ² promulgated a regulation interpreting the Petition to Correct Error Statute. 50 Ind. Admin. Code 4.2–3–12 (1989) (repealed 2000). Prior to its repeal on April 1, 2000, this regulation provided a limitation period for filing a petition to correct error, stating that “[w]hile a taxpayer may petition for a correction of error if an error exists, there is a three (3) year limitation on claiming a refund of tax as provided in this article.” 50 I.A.C. 4.2–3–12(g)(4). After 50 Indiana Administrative Code 4.2–3–12 was repealed, new regulations were promulgated in both 2000 and 2009, regarding the Petition to Correct Error Statute. See 23 Ind. Reg. 1608 (Apr. 1, 2000); Ind. Reg. LSA Doc. No. 08–603(F) (Feb. 11, 2009) ( see http:// www. in. gov/ legislative/ register/ irtoc. htm) (stating that the 2000 regulations were superseded by 52 Indiana Administrative Code 2). Neither promulgation included a time limitation for filing a petition to correct error. See generally 23 I.R. 1608–17; 52 Ind. Admin. Code 2 (2013) ( see http:// www. in. gov/ legislative/ iac/).

In spite of the absence of a time limit in the Petition to Correct Error Statute and the interpretive regulations that were in effect when the Hutchersons filed their petitions, the Assessor persists in claiming the Hutchersons' petitions were untimely....